TSM 2026 Q2

Management raised full-year 2026 revenue growth guidance to slightly above 40% year-over-year in USD terms, up from prior expectations, citing robust technology differentiation and strong AI-related demand.

“we now expect our full year 2026 revenue growth to be slightly above 40% year-over-year in U.S. dollar terms”— C.C. Wei, Chairman and Chief Executive Officer

Second quarter revenue came in at $40.2 billion, the high end of guidance, driven by strong demand for leading-edge process technologies.

“We concluded our second quarter with revenue of $40.2 billion at the high end of our guidance”— C.C. Wei, Chairman and Chief Executive Officer

Management described AI-related demand as extremely robust, with customers and cloud service providers giving increasingly strong signals, raising conviction in the multi-year AI megatrend versus prior quarters.

“AI-related demand continues to be extremely robust.”— C.C. Wei, Chairman and Chief Executive Officer

CEO indicated the AI semiconductor CAGR is now stronger than previously communicated (previously mid-to-high 50%), though no updated figure was given because demand keeps increasing.

“Stronger than what we said before.”— C.C. Wei, Chairman and Chief Executive Officer

The emergence of agentic AI is causing a resurgence in CPU demand within AI data centers, adding a new incremental driver of silicon demand beyond AI accelerators.

“The emergence of agentic AI is leading to a resurgence in the role of CPUs in AI data centers”— C.C. Wei, Chairman and Chief Executive Officer

A14 customer tape-out activity is running ahead of schedule, with pre-production now set for 2027 and volume production for 2028, indicating faster-than-expected development progress.

“Customer tape-out activity is ongoing and ahead of schedule.”— C.C. Wei, Chairman and Chief Executive Officer

In passing: ASML plans to adapt its High NA EUV lithography tools with TSMC and other chipmakers to print larger AI data-center chips. ASML (ASML) and Chip Giants like TSMC Plot a Bigger Canvas for Building AI Chips — finance.yahoo.com · 20 September 2026

Second quarter gross margin rose 150 basis points sequentially to 67.7%, slightly ahead of guidance, driven by cost improvements and higher utilization, partly offset by overseas fab dilution.

“gross margin increased by 150 basis points sequentially to 67.7%, slightly ahead of our guidance”— Wendell Huang, Senior Vice President and Chief Financial Officer

Third quarter gross margin is guided down 1.7 points to 66% at midpoint as the steep 2nm ramp is expected to dilute margin by 3-4 points, partly offset by strong demand and cost improvements.

“we expect the steep ramp-up of our 2 nm technology to dilute our gross margin by about 3 percentage points to 4 percentage points”— Wendell Huang, Senior Vice President and Chief Financial Officer

MediaTek launched a new flagship chip built on TSMC's 2-nanometer process, with Nvidia and Alphabet also committed to the node. TSMC’s 2nm Era Is Accelerating With MediaTek. Nvidia and Alphabet Already Have Money on the Table — insidermonkey.com · 15 September 2026

Packaging capacity is so tight it is limiting customer growth, prompting management to welcome emerging alternative packaging technologies like EMIB-T, since easing back-end constraints would boost TSMC's front-end wafer business.

“We welcome additional flexibility in the market. That will help TSMC's front-end wafer business growth”— C.C. Wei, Chairman and Chief Executive Officer

2026 cash dividend per share was raised to TWD 24, up 33% year-over-year, an acceleration from the 28.6% year-over-year increase paid in 2025.

“In 2026, they will receive TWD 24 per share, up another 33% year-over-year.”— Wendell Huang, Senior Vice President and Chief Financial Officer

Full-year 2026 capital budget was raised to $60-64 billion given continued strong structural demand including the newly emerging agentic AI market, a step-up in investment intensity.

“we have decided to raise our full year 2026 capital budget to be between $60 billion and $64 billion”— Wendell Huang, Senior Vice President and Chief Financial Officer

CapEx over the next three years is now expected to be even more significantly higher than the prior three years, an escalation from previous commentary on elevated spending.

“The CapEx in the next three years will be even more significantly higher than the past three years.”— Wendell Huang, Senior Vice President and Chief Financial Officer

TSMC announced an additional $100 billion investment in Arizona to build several more fabs for 2nm-and-below logic and advanced packaging, a major expansion beyond prior U.S. commitments.

“we would like to announce an additional $100 billion investment in Arizona”— C.C. Wei, Chairman and Chief Executive Officer

Consumer and price-sensitive end markets are increasingly challenged by rising component prices and macroeconomic uncertainty, prompting management to become more prudent in business planning despite robust AI demand elsewhere.

“we observe consumer and the price-sensitive end market segments are being challenged due to the impact of rising component prices and macroeconomic uncertainties”— C.C. Wei, Chairman and Chief Executive Officer